Huwei’s US debut hits rock bottom, as distribution deal fails for newest phone

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People walk past a sign board of Huawei at CES (Consumer Electronics Show) Asia 2016 in Shanghai, China May 12, 2016. REUTERS/Aly Song

Huwei’s US debut hits rock bottom, as distribution deal fails for newest phone

Chinese smartphone maker Huawei hit a major stumbling block in its US expansion plans, after it’s first ever deal with an American carrier fell through due to reported political pressure. A second deal is also looking shaky.

Huawei had been due to launch its new flagship smartphone, the Huawei Mate 10 Pro, with AT&T in February. But according to The Wall Street Journal, the carrier backed out of the deal without any explanation. AT&T is the second biggest carrier in the US, and the collapse of the deal essentially shuts Huawei out of the US smartphone market.

A second deal with Verizon is looking unlikely, with the carrier also under political pressure to cancel a planned summer launch of the Mate 10 Pro, according to Android Police.

At&T and Verizon have not commented, but Huawei said it would be launching the Mate 10 Pro in the US without carrier partners.

AT&T’s cancellation comes weeks after the US Senate and House Intelligence committees reportedly sent letters to the FCC arguing that Huawei was a security threat. It was also worried about US carrier deals with the smartphone maker.

It’s awkward timing for Huawei, which launched the Mate 10 Pro at the Consumer Electronics Show this week. During the launch, consumer CEO Richard Yu said the firm had the ” highest standard in privacy and security” and said the carrier deals were a “big loss” for customers, who now have less choice.

Huawei said it would sell the Mate 10 Pro in the US unlocked, meaning it won’t be attached to any particular carrier. Most US consumers don’t buy unlocked phones though, instead going through carriers to buy new phones.

Huawei is the fourth biggest smartphone maker globally due to its massive popularity in Asia, according to IDC. It’s also made strong inroads in the UK, and is the third biggest brand behind Samsung and Apple, according to Counterpoint. But it’s never managed to crack the US, and the firm will have to rethink its expansion plans after this latest blow.

This isn’t the first time US politicians have suspected Huawei of being a security threat, though they have never offered proof in public.

Back in 2012, when Huawei was better known for making broadband equipment, the US warned that the Chinese government might be using the firm’s kit to spy on foreign countries. At the time, Huawei hit out at international “protectionism.” The UK’s security watchdog also worried about a telecoms equipment deal between BT and Huawei. Huawei eventually established a UK office to probe its own kit for security flaws, overseen by the government.